Speaking to BBC Radio 4's Today programme, Cheshire said the speculation had become a 'circus' and added: 'The only analogy I can have to it is like having a bunch of nosy neighbours watching your house. Somebody sees somebody in a suit going into a room.

Share price rebound: Debenhams shares have bounced back today, rising by about 7%

'The second person concludes it's a doctor, the third person concludes it's an undertaker and by the time it gets to the end of the day you've got cause of death and everyone's looking forward to the funeral.'

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The rebound in share price comes after shares fell more than 10 per cent yesterday, wiping off £15.9million off its value amid reports it was considering a restructuring plan that could involve axing some of its 165 stores from the High Street.

But Cheshire today hit back at such claims as he told the radio programme: 'We have always said we would look at every option in the longer term.

'The implications of the newspapers was that we are actively driving a CVA with KPMG and it is simply not true.'

His comments come as the group decided to bring its trading statement forward yesterday.

It states Debenhams expects to report pre-tax profit, excluding exceptional items, for the full year to come in around £33million - within the current market range of £31million to £36.5million.

Underlying earnings are forecast to come in at £157million, with net debt of approximately £320million.

Cheshire said in a statement: 'As we stated in June, the board continues to work with its advisers on longer term options, which include strengthening our balance sheet and reviewing non-core assets.

'This activity is in order to maximise value for shareholders and protect other stakeholders, including our employees.'

Five years ago, Debenhams boasted profits of £150million but half a decade of falling sales and heavy discounting has hurt margins.

It has issued three profit warnings this year, axed around 400 jobs and closed two stores. In January it announced plans to ramp up efficiency savings, with another £10million earmarked for this financial year and £20million extra annually.